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Grandfathering and greenhouse: the role of compensation and adjustment assistance in the introduction of a carbon emissions trading scheme for Australia

Author

Listed:
  • Menezes, Flavio
  • Quiggin, John
  • Wagner, Liam

Abstract

The terms "grandfather clause" and "grandfathering" describe elements of a policy programme in which existing participants in an activity are protected from the impact of regulations, restrictions or charges applied to new entrants. In this paper, the role of grandfathering in the design of a carbon emissions trading scheme in Australia is assessed. It is argued that adjustment assistance policies such as those adopted in conjunction with previous microeconomic reform programmes are preferable to policies based on the free issue of emission permits. The suggestion that owners of capital assets should be compensated for changes in government policy that reduce the expected flow of income from those assets represents a radical, and undesirable, policy innovation.

Suggested Citation

  • Menezes, Flavio & Quiggin, John & Wagner, Liam, 2008. "Grandfathering and greenhouse: the role of compensation and adjustment assistance in the introduction of a carbon emissions trading scheme for Australia," Risk and Sustainable Management Group Working Papers 152094, University of Queensland, School of Economics.
  • Handle: RePEc:ags:uqsers:152094
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    File URL: http://ageconsearch.umn.edu/record/152094/files/WPC08_4.pdf
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    References listed on IDEAS

    as
    1. Espey, James A. & Espey, Molly, 2004. "Turning on the Lights: A Meta-Analysis of Residential Electricity Demand Elasticities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 0(Number 1), pages 1-17, April.
    2. Donghun Kim & Ronald W. Cotterill, 2008. "COST PASS-THROUGH IN DIFFERENTIATED PRODUCT MARKETS: THE CASE OF U.S. PROCESSED CHEESE -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 32-48, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Wood, Peter John & Jotzo, Frank, 2011. "Price floors for emissions trading," Energy Policy, Elsevier, vol. 39(3), pages 1746-1753, March.
    2. Huisman, Ronald & Kiliç, Mehtap, 2015. "Time variation in European carbon pass-through rates in electricity futures prices," Energy Policy, Elsevier, vol. 86(C), pages 239-249.
    3. Patrick Hamshere & Liam Wagner, 2012. "Potential Impacts of Subprime Carbon on Australia’s Impending Carbon Market," Energy Economics and Management Group Working Papers 14, School of Economics, University of Queensland, Australia.
    4. Lambie, Neil Ross, 2010. "Understanding the effect of an emissions trading scheme on electricity generator investment and retirement behaviour: the proposed Carbon Pollution Reduction Scheme," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 0(Issue 2), pages 1-15.
    5. repec:bla:jpbect:v:19:y:2017:i:4:p:841-859 is not listed on IDEAS
    6. Granqvist, Harry & Grover, David, 2016. "Distributive fairness in paying for clean energy infrastructure," LSE Research Online Documents on Economics 66486, London School of Economics and Political Science, LSE Library.
    7. John Freebairn, 2012. "Tax mix change to reduce greenhouse gas emissions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(1), pages 102-116, January.
    8. Flavio M. Menezes & Jorge Pereira, 2017. "Emissions abatement R&D: Dynamic competition in supply schedules," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(4), pages 841-859, August.
    9. Phillip Wild, William Paul Bell, and John Foster, 2015. "Impact of Carbon Prices on Wholesale Electricity Prices and Carbon Pass-Through Rates in the Australian National Electricity Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    10. Granqvist, Harry & Grover, David, 2016. "Distributive fairness in paying for clean energy infrastructure," Ecological Economics, Elsevier, vol. 126(C), pages 87-97.
    11. Phil Wild & William Paul Bell & John Foster, 2012. "The Impact of Carbon Pricing on Wholesale Electricity Prices, Carbon Pass-Through Rates and Retail Electricity Tariffs in Australia," Energy Economics and Management Group Working Papers 5-2012, School of Economics, University of Queensland, Australia.

    More about this item

    Keywords

    Environmental Economics and Policy; Resource /Energy Economics and Policy;

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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